Question: Alcan stock recently closed at 52 51 Assume that you write

Alcan stock recently closed at $52.51. Assume that you write a covered call on Alcan by writing one September call with a strike price of $55, and buying 100 shares of stock at the market price. The option premium that you obtain from writing the call is $370. Assume the stock will pay no dividends between now and the expiration date of the option.
a. What is the total profit if the stock price remains unchanged?
b. What is the total profit if the stock price goes up to $55?
c. What is the total loss if the stock price goes down to $49?

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  • CreatedApril 28, 2015
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